Sorrell Holdings LLC v. Infinity Headwear & Apparel, LLC
ORDER denying 144 Motion to Dismiss Case and Setting Deadlines for Discovery and Dispositive Motions. Signed by Honorable Barry A. Bryant on November 17, 2021. (mll)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
SORRELL HOLDINGS, LLC
Civil No. 4:16-cv-04019
INFINITY HEADWEAR &
On November 15, 2021, the Court sua sponte continued the trial setting of this matter. 1
Before the Court is Defendant’s Motion to Dismiss. ECF No. 144. Plaintiff did not file a response;
however, the Parties argued the Motion to Dismiss at the final pre-trial conference on November
15, 2021. 2 ECF No. 146.
This case was filed on February 29, 2016. ECF No. 1. This matter was set for jury trial
for November 15, 2021. ECF No. 117. On November 12, 2021, Plaintiff filed its Motion to allow
Entry of Assignment and Maintenance Fee Statements into Evidence.
ECF No. 142. The
documents at issue had not been previously disclosed to Defendant during initial disclosures or
discovery. Defendant responded and objected to the newly disclosed documents being allowed as
evidence in the case. ECF No. 143. On November 8, 2021, the Court had ruled that any document
not disclosed during discovery would not be allowed as evidence at the trial. ECF No. 138. On
November 14, 2021, one day before jury selection was set to commence and in accordance with
its prior Orders, the Court entered its Order denying the Motion to allow Entry of Assignment and
The Court will enter a separate Order resetting the trial date in this matter.
The Court orally denied the Motion to Dismiss at the hearing on November 15, 2021. This Order is
intended to put the Court’s reasons, as stated on the record, in writing for the benefit of the Parties.
Maintenance Fee Statements into Evidence. ECF No. 145. That same day, November 14, 2021,
Defendant filed the instant Motion to Dismiss. ECF No. 144.
Defendant argues in its Motion to Dismiss that (1) Plaintiff failed to timely disclose
evidence it now seeks to introduce at trial, (2) the Court ruled such evidence will not be allowed
to be introduced and (3) as a result the Plaintiff will not be able to meet it burden of proof showing
it has standing to pursue the claims in the Complaint. This case involves a claim of patent
infringement. Specifically, Defendant argues:
[O]nly the “patentee” can bring an action for patent infringement. 35 U.S.C. §
281; Keranos, LLC v. Silicon Storage Technology, Inc., 797 F.3d 1025, 1030 (Fed.
Cir. 2015). The “patentee” is the “patentee to whom the patent was issued [and]
also the successors in title to the patentee.” 35 U.S.C. § 100(d). These statutes
govern standing to sue in patent cases. Keranos, 797 F.3d at 1030-31. Standing is
a jurisdictional issue, which means it can’t be waived, and it can be raised at any
time by the court or any party—even for the first time on appeal. Pandrol USA, LP
v. Airboss Railway Products, Inc., 320 F.3d 1354, 1367 (Fed. Cir. 2003).
At the hearing on November 15, 2021, Plaintiff acknowledged that it would be unable to meet its
burden of showing it was the legal assignee of the patent at issue in this case without the documents
the Court had ruled were excluded because of Plaintiff’s failure to disclose in a timely manner.
There is no dispute the Plaintiff failed to disclose the written assignment of the patent,
either in its initial disclosures or in its responses to discovery propounded by the Defendant.
Further, there is no dispute the Plaintiff cannot establish its right to pursue the claimed patent
infringement without the written assignment. If a party fails to timely disclose information
contemplated by Rules 26(a) and (e), the Court “has wide discretion to fashion a remedy or
sanction as appropriate for the particular circumstances of the case.” Wegener v. Johnson, 527
F.3d 687, 692 (8th Cir. 2008). The Court may exclude the information or testimony unless the
party’s failure to comply is substantially justified or harmless. See Id. at 692; FED. R. CIV. P.
37(c)(1). Plaintiff candidly admits there is no justification for the failure to disclose here. Further,
there is no reasonable claim such failure to disclose until 3 days prior to the trial date can be
considered harmless to Defendant’s trial preparation in this case. The Court finds that allowing
introduction of the proffered written exhibits, disclosed 3 days prior to trial, would be harmful to
Defendant. The question remains, what sanction is appropriate for this failure to disclose.
The Court’s discretion in fashioning an appropriate sanction is not absolute and narrows as
the severity of the sanction it elects increases. See Wegener, 527 F.3d at 692. For example, where
a sanction is “tantamount to a dismissal” the Court should consider some lesser sanction.
Heartland Bank v. Heartland Home Fin., Inc., 335 F.3d 810, 817 (8th Cir. 2003). When fashioning
the appropriate remedy or sanction, the Court should consider: (1) the reason for noncompliance,
(2) the surprise and prejudice to the opposing party, (3) the extent to which allowing the
information or testimony would disrupt the order and efficiency of the trial, and (4) the importance
of the information or testimony. See Wegener, 527 F.3d at 692.
While Plaintiff argues there is no real surprise in this late disclosure, as noted above
Plaintiff’s counsel candidly admitted to the Court that he had failed to disclose the material and
had no excuse for the failure to disclose. Despite the importance of the documents at issue, it is
also apparent the nondisclosure was inadvertent.
With respect to the second and third Wegener factors, the Court finds that the surprise and
prejudice the Defendants might suffer due to the late disclosure of the patent assignment
documents can be cured by reopening discovery for a short window of time. A sixty-day extension
will be sufficient for Defendant to test the proof and allow it to fully prepare for trial.
As for the final Wegener factor, it is clear the patent assignment document is critical to the
Plaintiff’s claims. While there does not appear to be any bad faith on the part of Plaintiff’s counsel,
to dismiss Plaintiff’s claims for what is essentially an oversight by its counsel would be an extreme
Plaintiff asks the Court to consider a lesser sanction than simply excluding the evidence,
proceeding with the trial and dismissing the claims when Plaintiff cannot meet its burden of
proving standing to sue. Plaintiff orally moved for a lesser sanction but does not suggest what
lesser sanction would appropriate in this instance.
As stated above, exclusion of the documents at issue would be tantamount to a dismissal
of the claims here. While Court is troubled by what appears to be a blatant violation of the rules
governing disclosure and discovery in this case, Plaintiff’s counsel did not act in bad faith and in
fact were very candid with the Court regarding their failure to follow the rules. Based on all the
facts before it, the Court believes a sanction less than exclusion and ultimate dismissal is
appropriate. The Court will therefore continue the trial date for a short period of time, set a new
deadline for limited discovery and a new deadline for filing dispositive motions. Further, the Court
will invite Defendant to file its motion seeking costs and fees associated with Plaintiff’s failure to
disclose the documents at issue in accordance with the Rules of this Court and the Federal Rules
of Civil Procedure.
For the foregoing reasons, Defendant’s Motion to Dismiss (ECF No. 144) is DENIED.
The Court also enters the following deadlines for discovery and dispositive motions:
1. The Parties shall supplement all discovery responses and disclosures no later than
December 1, 2021.
2. The discovery period is this matter is re-opened until January 31, 2022, for the limited
scope and purpose of allowing Defendant to depose Roger Sorrell.
3. The Parties may file any new dispositive motions on or before January 31, 2022. In
these motions, the Parties should not address any matter previously ruled on by this Court.
4. Because Plaintiff failed to comply with discovery and disclosure obligations under the
rules of this Court and the Federal Rules of Civil Procedure, the trial date for this matter was
continued. As a result of Plaintiff’s failure, Defendant may seek, by separate Motion, fees and
costs associated with this continuance, and Plaintiff’s failure to comply with its initial discovery
and disclosure obligations.
DATED this 17th day of November 2021.
Barry A. Bryant
HON. BARRY A. BRYANT
U.S. MAGISTRATE JUDGE
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